Kalaris Therapeutics, Inc 10-Q for FY2020 Q2

About this 10-Q

Headline figures

Kalaris Therapeutics, Inc. (KLRS)

10-Q 2020-09-02 For: 2020-06-30

Added on April 08, 2026

Kalaris Therapeutics, Inc filed this 10-Q on September 2, 2020, covering the quarter ended June 30, 2020 (FY2020 Q2).

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

Quarter ended June 30, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net loss: $11.63M; compared with a net loss of $5.3M a year earlier

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Delaware		83-1971007
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
139 Main Street, Suite 500 Cambridge, MA		02142
(Address of principal executive offices)		(Zip Code)

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss	4
	Condensed Consolidated Statements of Convertible Preferred Stock and Changes in Stockholders’ Equity	5
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	30
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	76
Item 3.	Defaults Upon Senior Securities	76
Item 4.	Mine Safety Disclosures	76
Item 5.	Other Information	76
Item 6.	Exhibits	77
Signatures		78

(in thousands, except share and per share amounts)	June 30, 2020			December 31, 2019
Assets
Current assets:
Cash and cash equivalents	$	78,267		$	61,084
Short-term investments		26,184			64,993
Accrued interest		58			262
Unbilled grant receivables		354			298
Prepaid expenses and other current assets		2,425			676
Total current assets		107,288			127,313
Property and equipment		313			350
Operating lease right-of-use assets		10,245			11,759
Total assets	$	117,846		$	139,422
Liabilities, convertible preferred stock and stockholders’ deficit
Current liabilities:
Accounts payable	$	680		$	630
Accrued expenses		4,546			5,163
Operating lease liability, current		3,147			3,067
Amount due to related party		542			246
Total current liabilities		8,915			9,106
Operating lease liability, long term		7,098			8,692
Total liabilities		16,013			17,798
Series B preferred stock, $0.0001 par value: 14,877,697 shares authorized, issued and outstanding at June 30, 2020 and December 31, 2019; net of issuance costs (liquidation value of $121.3 million)		120,923			120,923
Series A preferred stock, $0.0001 par value: 64,520,653 shares authorized at June 30, 2020 and December 31, 2019; 44,520,653 shares issued and outstanding at June 30, 2020 and December 31, 2019; net of issuance costs (liquidation value of $66.8 million)		52,204			52,204
Stockholders’ deficit:
Common stock, $0.0001 par value: 90,000,000 shares authorized at June 30, 2020 and December 31, 2019; 6,559,348 and 6,502,929 issued at June 30, 2020 and December 31, 2019, respectively; 2,801,859 and 2,099,740 outstanding at June 30, 2020 and December 31, 2019, respectively		—			—
Additional paid-in capital		4,886			3,748
Accumulated other comprehensive income		110			68
Accumulated deficit		(76,290	)		(55,319	)
Total stockholders’ deficit		(71,294	)		(51,503	)
Total liabilities, convertible preferred stock and stockholders’ deficit	$	117,846		$	139,422

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands, except share and per share amounts)	2020			2019			2020			2019
Revenue	$	—		$	—		$	—		$	165
Operating expenses:
Research and development		8,885			2,755			15,724			3,906
General and administrative		3,268			3,190			6,269			4,977
Total operating expenses		12,153			5,945			21,993			8,883
Loss from operations		(12,153	)		(5,945	)		(21,993	)		(8,718	)
Total other income, net:
Interest income		166			503			623			619
Other income, net		355			140			399			273
Net loss	$	(11,632	)	$	(5,302	)	$	(20,971	)	$	(7,826	)
Net loss per share — basic and diluted	$	(4.43	)	$	(5.05	)	$	(8.66	)	$	(8.49	)
Weighted-average common shares outstanding — basic and diluted		2,625,648			1,050,190			2,420,797			921,995
Comprehensive loss:
Net loss	$	(11,632	)	$	(5,302	)	$	(20,971	)	$	(7,826	)
Other comprehensive (loss) income, net of tax:
Unrealized (loss) gain on available-for-sale securities		(134	)		129			42			129
Total other comprehensive (loss) income		(134	)		129			42			129
Comprehensive loss	$	(11,766	)	$	(5,173	)	$	(20,929	)	$	(7,697	)

	Series B Preferred Stock				Series A Preferred Stock				Common Stock				Additional Paid-In		Accumulated Other Comprehensive		Accumulated			Total Stockholders’
(in thousands, except share amounts)	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Income		Deficit			Deficit
Balance at December 31, 2018		—	$	—		42,066,666	$	52,204		747,231	$	—	$	858		—	$	(31,480	)	$	(30,622	)
Issuance of common stock, upon vesting of restricted stock		—		—		—		—		140,106		—		—		—		—			—
Stock-based compensation		—		—		—		—		—		—		231		—		—			231
Net loss		—		—		—		—		—		—		—		—		(2,524	)		(2,524	)
Balance at March 31, 2019		—	$	—		42,066,666	$	52,204		887,337	$	—	$	1,089	$	—	$	(34,004	)	$	(32,915	)
Issuance of Series B Preferred Stock, net of $330 issuance costs		14,877,697	$	120,923		—		—		—		—		—		—		—			—
Issuance of common stock, upon vesting of restricted stock		—		—		—		—		510,876		—		—		—		—			—
Unrealized gain on available-for-sale securities		—		—		—		—		—		—		—		129		—			129
Stock-based compensation		—		—		—		—		—		—		1,441		—		—			1,441
Net loss		—		—		—		—		—		—		—		—		(5,302	)		(5,302	)
Balance at June 30, 2019		14,877,697	$	120,923		42,066,666	$	52,204		1,398,213	$	—	$	2,530	$	129	$	(39,306	)	$	(36,647	)

	Six Months Ended June 30,
(in thousands)	2020			2019
Cash flows from operating activities
Net loss	$	(20,971	)	$	(7,826	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		37			—
Accretion of discounts on short-term investments		7			(148	)
Stock compensation expense		1,138			1,672
Changes in operating assets and liabilities:
Subscription receivable and unbilled grants receivable		(56	)		159
Accrued interest		204			(254	)
Prepaid expenses and other current assets		(1,749	)		(378	)
Accounts payable, accrued expenses and amount due to related party		(271	)		2,049
Deferred grant revenue		—			(158	)
Net cash used in operating activities		(21,661	)		(4,884	)
Cash flows from investing activities
Purchase of property and equipment		—			(225	)
Purchase of short-term investments		(26,156	)		(99,344	)
Maturities of short-term investments		65,000			—
Net cash provided by (used in) investing activities		38,844			(99,569	)
Cash flows from financing activities
Proceeds from issuance of Series B Preferred Stock		—			121,253
Issuance costs related to the issuance of preferred stock		—			(330	)
Net cash provided by financing activities		—			120,923
Net increase in cash, cash equivalents and restricted cash		17,183			16,470
Cash, cash equivalents and restricted cash at beginning of period		61,084			24,960
Cash, cash equivalents and restricted cash at end of period	$	78,267		$	41,430
Non-cash investing and financing activities
Unrealized gain on short-term investments		42			129
Right-of-use assets obtained in exchange for operating lease liability		—			6,890

	June 30, 2020
(in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
U.S. treasury securities	$	4,995	-		$	(1	)	$	4,994
U.S. government treasury securities		21,072		118		-			21,190
Totals	$	26,067	$	118	$	(1	)	$	26,184

	December 31, 2019
(in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
U.S. government treasury securities	$	64,925	$	68	$	—	$	64,993
Totals	$	64,925	$	68	$	—	$	64,993

	June 30, 2020
(in thousands)	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market fund	$	53,139	$	—	$	—	$	53,139
U.S. treasury securities		19,995		-		-		19,995
Totals	$	73,134	$	—	$	—	$	73,134
Short-term investments:
U.S. treasury securities and government treasury securities	$	26,184	$	—	$	—	$	26,184
Totals	$	26,184	$	—	$	—	$	26,184

2020 (remaining 6 months)	$	1,800
2021		3,600
2022		3,600
2023		2,100
Total lease payments		11,100
Less: interest (4.53% - 5.75%)		(855	)
Total lease liability	$	10,245
Lease liability – current	$	3,147
Lease liability – long-term	$	7,098

	June 30, 2020
Preferred Stock, as converted		39,859,139
Unvested restricted stock units and stock options outstanding under the 2018 Equity Incentive Plan		3,856,978
Stock available for grant under the 2018 Equity Incentive Plan		375,093
		44,091,210

	June 30, 2020
Common stock granted under the 2018 Equity Incentive Plan		6,658,878
Common stock available for grant under the 2018 Equity Incentive Plan		375,093
		7,033,971

(in thousands, except share amounts)	Preferred Stock Authorized		Preferred Stock Issued and Outstanding		Carrying Value		Liquidation Value		Common Stock Issuable Upon Conversion
Series A1 Preferred Stock		20,000,000		—	$	—	$	—		—
Series A2 Preferred Stock		20,000,000		20,000,000		29,775		30,000		13,420,970
Series A3 Preferred Stock		22,453,987		22,453,987		19,364		33,681		15,067,706
Series A4 Preferred Stock		2,066,666		2,066,666		3,065		3,100		1,386,831
Series B Preferred Stock		14,877,697		14,877,697		120,923		121,253		9,983,632
Total		79,398,350		59,398,350	$	173,127	$	188,034		39,859,139

	Restricted Stock
	Shares			Weighted Average Grant Date Fair Value
Unvested as of January 1, 2020		4,403,148		$	1.87
Granted		64,016			3.19
Forfeited		(6,710	)		3.01
Vested		(702,119	)		1.88
Unvested as of June 30, 2020		3,758,335		$	1.89

	Stock Options
	Shares		Weighted Average Exercise Price		Weighted Average Contractual Life (in years)		Aggregate Intrinsic Value
Options outstanding as of January 1, 2020		44,960	$	3.01		9.5
Granted		53,683		4.50		9.9
Exercised		—		—		—
Forfeited		—		—		—
Options outstanding as of June 30, 2020		98,643	$	3.82		9.6		—
Options vested and exercisable at June 30, 2020		11,238		3.01		9.3		—

	Three Months Ended June 30, 2020
Expected term (in years)		6.11
Expected volatility		89.5	%
Risk-free interest rate		0.48	%
Expected dividend yield		—
Fair value of common stock	$	4.60

	June 30,
	2020		2019
Series A2 Preferred Stock		20,000,000		20,000,000
Series A3 Preferred Stock		22,453,987		22,453,987
Series A4 Preferred Stock		2,066,666		2,066,666
Series B Preferred Stock		14,877,697		14,877,697
Options to purchase common stock		98,643		—
Unvested restricted stock		3,758,335		5,353,791

	Three Months Ended June 30,
	2020			2019			Change
	(in thousands)
Operating expenses:
Research and development	$	8,885		$	2,755		$	6,130
General and administrative		3,268			3,190			78
Total operating expenses		12,153			5,945			6,208
Loss from operations		(12,153	)		(5,945	)		(6,208	)
Total other income, net:
Interest income		166			503			(337	)
Other income, net		355			140			215
Net loss	$	(11,632	)	$	(5,302	)	$	(6,330	)

	Six Months Ended June 30,
	2020			2019			Change
	(in thousands)
Revenue	$	—		$	165		$	(165	)
Operating expenses:
Research and development		15,724			3,906			11,818
General and administrative		6,269			4,977			1,292
Total operating expenses		21,993			8,883			13,110
Loss from operations		(21,993	)		(8,718	)		(13,275	)
Total other income, net:
Interest income		623			619			4
Other income, net		399			273			126
Net loss	$	(20,971	)	$	(7,826	)	$	(13,145	)

Exhibit Number		Description

3.1		Third Amended and Restated Certificate of Incorporation of AlloVir, Inc. (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K (File No. 001-39409) filed on August 3, 2020).

3.2		Amended and Restated Bylaws of AlloVir, Inc. (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K (File No. 001-39409) filed on August 3, 2020).

4.1		Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 of the Registrant’s Registration Statement on Form S-1 (File No. 333-239698) filed on July 23, 2020).

10.1		2018 Equity Incentive Plan, and form of award agreements thereunder (incorporated by reference to Exhibit 10.1 of the Registrant’s Registration Statement on Form S-1 (File No. 333-239698) filed on July 23, 2020).

10.2		2020 Stock Option and Grant Plan, and form of award agreements thereunder (incorporated by reference to Exhibit 10.2 of the Registrant’s Registration Statement on Form S-1 (File No. 333-239698) filed on July 23, 2020).

10.3		2020 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.3 of the Registrant’s Registration Statement on Form S-1 (File No. 333-239698) filed on July 23, 2020).

10.4		Form of Indemnification Agreement between the Registrant and each of its directors (incorporated by reference to Exhibit 10.4 of the Registrant’s Registration Statement on Form S-1 (File No. 333-239698) filed on July 23, 2020).

10.5		Form of Indemnification Agreement between the Registrant and each of its executive officers (incorporated by reference to Exhibit 10.5 of the Registrant’s Registration Statement on Form S-1 (File No. 333-239698) filed on July 23, 2020).

10.6		Sponsored Research Agreement, by and between Baylor College of Medicine and the Registrant, dated as of June 18, 2019, as amended by the Amendment to Sponsored Research Agreement, entered into on April 7, 2020 (incorporated by reference to Exhibit 10.8 of the Registrant’s Registration Statement on Form S-1 (File No. 333-239698) filed on July 23, 2020).

31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

	Company Name

Date: September 2, 2020	By:	/s/ David Hallal
		David Hallal
		Chief Executive Officer and Director (Principal Executive Officer)

Date: September 2, 2020	By:	/s/ Vikas Sinha
		Vikas Sinha
		President, Chief Financial Officer and Director (Principal Financial Officer and Principal Accounting Officer)